CCC PPPPP U U CCC N N EEEEE W W W SSS C C P p U U C C NN N E W W W S S C P P U U C N N N E W W W S C PPPPP U U C N N N EEE W W W W SSS C P U U C N N N E WW WW S C C P U U C C N NN E W W S S COC P UUUU CCC N N EEEEE W W SSS California Public Utilities Commission 505 Van Ness Avenue, Room 5301 San Francisco, CA 94102 CONTACT: Armando Rendon October 26, 1995 CPUC-098 415-703-1366 (R95-05-043) CPUC ISSUES KEY RULING IN RESELLER PHASE OF LOCAL PHONE COMPETITION PROCEEDING The California Public Utilities Commission (CPUC) today announced that hearings on resale issues in the local phone competition proceeding will conclude November 9, but hearings on whether local phone companies will be compensated for the impact of competition on them will be deferred until late December. Among the important questions being considered in hearings on resale competition is what wholesale rates local phone companies may charge resellers for basic phone service. The Commission is scheduled to issue a decision early next year. Today's Assigned Commissioner's ruling states that the schedule for dealing with the issue referred to as "franchise impacts" allows for a "discovery" period during which parties may request data from the phone companies until November 20, with responses due December 15. Evidentiary hearings will run from January 3 through 25 of next year. A proposed decision is slated to be circulated for comment by April 4 with a final Commission vote scheduled for May 8. Assigned Commissioner P. Gregory Conlon, concerned with the possibility that adverse impacts might occur before the CPUC ruled on compensation, invited the local phone companies to propose a method for tracking any impacts to preserve their ability to recover these costs during the interim. Local phone companies raised issues regarding the impact of competition on their revenues and shareholder returns, and sought to have the issues reviewed along with other items on the hearing schedule. The Commission determined that to deal with Pacific and GTEC's compensation concerns would cause delays in -more- implementing full local competition by the legislatively set deadline of January 1, 1997. The Commission also added three weeks of additional hearings and will likely bring in another Administrative Law Judge to handle the additional hearings. Pacific and GTEC sought to have the franchise impact issue reviewed as part of the current hearings on resale competition in order to obtain revenues starting next year to make up for any projected losses. The California Telecommunications Coalition, made up of long distance companies, cable firms, and consumer groups, asked the Commission for more time to review the data to be provided by Pacific and GTEC on how opening local phone lines to rival firms would affect local phone companies. The Coalition argued that it would be premature to rule on the question until competition had actually been in place for a while. The CPUC's Division of Ratepayer Advocates, the consumer advocate section of the agency, supported granting added time, lest other parties' due process rights be violated. Any estimate of effects on the local phone firms at this time is "entirely speculative," the DRA asserted. Meanwhile, some 66 firms who filed for authority to enter the local phone market by January 1, 1996, as competitive local carriers (CLC), as the rival firms will be called, are under review for certification by CPUC staff. Some of those CLCs which will be leasing lines for resale will be able to offer phone service after March 1, 1996. When consumers will actually be able to make a call on a different competitive service will depend on how quickly CLCs can get their services online and garner customers. This could mean startup dates early next spring or no later than summer of next year. ###